How to Buy I Bonds: Step-by-Step Instructions | The Motley Fool (2024)

Since you need to be 18 years old to buy Series I or Series EE bonds, adults will need to buy bonds on behalf of their children if they want their kids to own them. Here's how to buy bonds for a minor child:

1. Log in to your TreasuryDirect account.
2. Navigate to the ManageDirect tab on the top of the screen.
3. Under the "Manage My Linked Accounts" section, click "Establish a Minor Linked Account."
4. Enter your minor child's personal information, including their Social Security number.
5. Wait for the minor's account to be approved; it may happen instantly.
6. Navigate again to the My Account tab.
7. Click on the newly created account for your child under "Linked Accounts Information." This functionally changes the account in use to your minor's account.
8. Navigate to the BuyDirect tab and choose Series I bonds.
9. Indicate the amount you'd like to buy and complete your purchase.

The balance of bonds you buy for your minor child will appear on the My Account tab under "Linked Accounts Information" once the purchase is complete.

The process is fairly similar to buying a gift for a minor, but it's important to confirm that the gift recipient also has a TreasuryDirect account.

1. Navigate to the BuyDirect tab and choose Series I bonds.
2. Select the gift recipient's registration from the drop-down list at the top of the page. If you've never created a registration for the recipient, click "Add New Registration."
3. When adding a new registration, make sure to indicate that "This is a Gift."
4. Return to the purchase page and designate the newly created registration as the savings bond recipient.
5. Purchase the desired amount of I Bonds, up to $10,000.
6. Complete the purchase and print a gift certificate for your records.

Note that the bonds will be delivered to your "Gift Box," and that you'll need to deliver the bond electronically to the recipient's account. This is a popular method for buying bonds when the recipient is the buyer's spouse.

Unfortunately, you can't purchase I Bonds in your individual retirement account (IRA) or in any other tax-advantaged account. You'll need to use any available cash or your tax refund to purchase I Bonds.

Remember that the balance of your I Bond allocation will sit in your TreasuryDirect account. You must hold the bonds for at least a year, and you will lose the last three months' worth of interest if you redeem the bonds before five years have passed since the purchase.

The only way to buy paper Series I bonds is with a tax refund.

However, there's no guarantee that you will actually receive a refund since you might end up owing the IRS at tax time. If you have a balance due, you won't be able to purchase paper I bonds.

If you do have a refund, you can buy up to $5,000 worth of paper I Bonds. You don't need to use your entire refund to purchase bonds, but you have the option to do so.

Indicate that you'd like to use some or all of your refund to buy paper bonds on IRS Form 8888. Include the form with your annual tax filing. The bonds should arrive at your address shortly.

There isn't anything special about the number 1,000 here. If you do want to own 1,000 I Bonds in $25 increments, you'd need to buy them over a span of three years because of the $10,000 purchase limit.

For example, you could buy 400 I Bonds the first year, 400 the second year, and 200 the third year. The point is that you wouldn't be able to buy 1,000 I Bonds all at once.

If you did want to own more I Bonds immediately (albeit indirectly), you might consider any of the following choices:

• Buying bonds for your spouse.
• Buying bonds for your minor child or children.
• Buying bonds for a trust with a separate tax ID.

I Bonds make a great investment for extra cash that you don't want to risk in the stock or bond markets. Since inflation spiked in 2022, I Bonds have offered a much greater return than a traditional checking or savings account since interest rates have risen in recent months. But you'll be constrained in the number of I Bonds you can buy in any one year.